Employers Exposed

...fighting exploitation at work

Debenhams, Lloyds Pharmacy, Subway, and St Mirren Football Club.

These are some of the major employers named and shamed on the Government’s list exposing over 350 employers that haven’t been paying the National Minimum Wage (NMW) or the National Living Wage (NLW) to their employees.

David Hession, Solicitor in Employment Law, takes a closer look at the list and how employers can ensure that they meet the legal requirements.

359 Employers Exposed

359 employers were found to be underpaying 15,513 workers by a staggering £994,685, according to the Department for Business, Energy and Industrial Strategy.

The Government also states that the HMRC is currently working on more than 1,500 other cases, and if any employers are caught flouting the laws they can expect to join the list.

This might not, however, be the most accurate representation of workers’ pay in the UK, with the Office for National Statistics (ONS) publishing data showing that 362,000 jobs weren’t paying workers the NMW in April 2016.

Thousands Owed To Workers

The report found that the worst affected industries included the following:

84 employers in hospitality failed to pay a total of £240,516.64 to 563 workers

51 employers in retail didn’t pay £220,103.78 to 167 workers

39 employers in hairdressing owed £65,964.20 to 85 workers

24 employers in social care didn’t pay £43,636.90 to 145 workers

Retail giant Debenhams found a place on the list and had to pay £134,894.83 to 11,858 of its workers after discovering that an accounting error resulted in their wages being £11 short.

It was also fined £63,000.

Commenting on the situation, a spokesperson for Debenhams said:

“As a responsible employer Debenhams is committed to the National Minimum Wage, and as soon as the error was identified by a routine HMRC audit last year, we reimbursed all those affected.”

Fast-food chain Subway failed to pay £3,676.01 to 18 members of its staff and St Mirren Football Club left one worker £1,286.03 out of pocket.

Some of the excuses made by employers for failing to pay the NMW or NLW included using tips to top up their pay, making pay reductions in order to fund Christmas parties, or forcing staff to pay for their uniforms.

It’s the first time that employers failing to pay their staff the National Living Wage, which was introduced in 2016 for workers over the age of 25, have been included on a list of this kind.

The National Minimum Wage and National Living Wage hourly rates increase every year and are set to rise this April to the following:

Individuals aged 25 and over: £7.50

Individuals aged between 21 – 24: £7.05

Individuals aged between 18 – 20: £5.60

Individuals under 18: £4.05

Apprentices: £3.50

Fighting Exploitation In The Workplace

Following the results of this investigation, the HMRC has issued employers with penalties that are worth in excess of £800,000.

As part of its plan to ensure employers comply with the minimum wage laws, the Government:

Will spend £25.3million on minimum wage enforcement over the next year

Has appointed the first Director of Labour Market Enforcement to help crack down on exploitation in the workplace

Introduced orders under the Immigration Act that meant employers could face criminal prosecutions and prison sentences of up to 2 years for mistreating their staff or not paying the national minimum wage

Commenting on the list, the Business Minister Margot James said:

“Every worker in the UK is entitled to at least the national minimum wage or living wage and this government will ensure they get it.”

“That is why we have named and shamed more than 350 employers who failed to pay the legal minimum, sending the clear message to employers that minimum wage abuses will not go unpunished.”

The TUC has, however, called for tougher fines and more prosecutions. General secretary Frances O’Grady said:

“This should be a wake-up call for employers who value their reputation. If you cheat your staff out of the minimum wage you will be named and shamed.”

Around 1.3% of employers aren’t getting the National Minimum Wage, according to the Office for National Statistics, which includes 178,000 full-time employees and 184,000 part-time staff.

As this doesn’t take into account those who are in internships or individuals who might have been wrongly classed as self-employed, the TUC believes that the figure might be an underestimate.

David comments:

“It’s a shame that the Government has to go to such lengths to ensure that employers comply with National Minimum Wage legislation.”

“But, on the other hand, it’s because of investigations like this that the Government can protect employees from being taken advantage of by their employers. It also reinforces the fact that every employer has a duty to ensure that their employees get at least the legal minimum wage, so that they can support themselves and their families.”

“Many workers often fear coming forward about being underpaid, as they think that they will be putting their jobs in jeopardy. But, it’s important to remember that the NMW is a legal requirement and you are entitled to this at the very least.”

“It is always advisable to try to discuss this issue with your employer first, as pay issues are often resolved internally. In some circumstances, the pay issue may have come about as a result of an administrative payroll error. But, if the issue persists, you can contact ACAS or HMRC for further guidance, and you can find information available online.”

“If you think you’re not being paid the NMW or NLW and want to know what legal action you can take, I can offer you employment advice and help ensure that you don’t miss out on your entitlement.”

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